Mixed Signals as Nospetco Commences supply of LPFO to Benue Cement

News coming in during the past week indicates that Nospetco has finally come of the shadows. But it is not all good news as another weekly insists that EFCC is tightening the noose on illegal finance houses, giving subtle prominence to Nospetco. Given two extremes, this leaves choice to our discretion. I’ll present both cases here but first I’ll enumerate a few of the scarce ‘facts’ available.

Upside of the News

Nospetco, Facts now Publicly Available:

Company Name: Nospetco Oil and Gas Limited
Managing Director: Alhaji Siddiq Manga
Logistics Manager: Mr. Mohammed Hafisu
Industrial Sales Manager: Mr. Abubakar Mohammed
Recent Major Contract Agreement: Supply of 1 million metric tones of Low pour fuel Oil (LPFO) to Benue Cement Company (BCC) Plc.
Contract in the Pipeline: Discussions have been opened for supply of large volume of diesel to Obajana Cement (Kogi State) and Ashaka Cement Company (Gombe State).
Recent Acquisition: 150 branded trucks for delivery of petroleum products.
Other Plans in the Pipeline: To Invest N3.5billion on the manufacturing of world class lubricants in Nigeria.
Brands (of Standard Lubricants) Undergoing Registration/Certification at the Federal Ministry of Commerce and Standard Organization of Nigeria: Nospet VHP 20W-50, Nospet SAE 40 Fieldspar HD40, Nospelube 80W-90, Nospexa3 and Indugear 320.
Miscellaneous: 50 trucks have been set aside for the purpose of completing the supply contract on time. This is needed as a boost to encourage the management of BCC to grant approval for the supply of additional volumes of LPFO to its plant located in Gboko.

So these are the ‘facts’ glean able from the article presented in the May 21st edition of Financial Standard. The upside is that Financial Standard described the company as an “emerging major petroleum marketing company”, and Alhaji Manga beat his chest in pride as he made the following statement: “Before now, activities in the downstream sector were dominated by the majors but the enabling environment and deregulation policy put in place has made us today to become the envy of major marketing companies especially in the distribution of diesel to industries and acquisition of their retail outlets to improve distribution of petroleum products to end users nationwide.”

That is a fantastic statement to make in the face of all the controversy. However, the downside is that Nospetco is conspicuously described as a limited liability company. If this was the only downside, a lot of people will ignore it and go about normal business. But Stocks watch magazine does not seem to have finished with Nospetco yet.

Downside of the News

In an article of the May 27th edition of Stocks watch magazine, writer; Adebayo Obajemu, strikes a different pose on the stance of the new finance houses, Nospetco inclusive.
Describing them in the light of the fraud laden finance houses of the 1990s, he reiterated the Central Bank’s discussion with the regulatory agencies – Securities and Exchange Commission and the Nigeria Stock Exchange, and its subsequent recruiting of the Economic and Financial Crimes Commission to investigate the illegal activities of these finance houses. Stating Treasure Interlinks, Treasure links, Wealth Spinners, Wealth Solution, Antonio Oil, Fort Laurel Silver Links, Spring of Wealth, GFS as examples, he further described Nospetco as the most magnificent and most patronized of them all. Disclosing that some of these companies wear sophisticated facades of respectable businesses such as; magnificent office, state of the art cars, certificate of incorporation and a sizable amount of clients, he went on to make his most vital point of all; none of them has the effrontery to openly display SEC’s approval!
He concluded by saying EFCC is still probing these finance houses, and that it is generally believed that their operations are illegal since majority of them are not registered to do the type of business they are doing.

Reading both sides of the coin, it becomes increasingly difficult to discern what is actually going on. However, on closer analysis one realizes that the evidence before us does not agree. While one talks about the growing prominence of Nospetco, the Oil and Gas limited liability company, the other decries the existence of Nospetco, the illegal finance house. These are obviously very different businesses. This raises an eyebrow. Are these two different companies? Or is this one company operating in different capacities to different participants of a multifaceted society? In a notoriously unpredictable country like ours, a future forecast of happenings acquires a clout of quintessential difficulty. We can only hope EFCC clears the mist.
One thing is for sure if/when Nospetco (either finance house or Oil and Gas Ltd.) goes publicly legit in its modus operandi and profit distribution; it is bye-bye to humongous profits. Unless, of cause, by the unprecedented intervention of providence.



Nospetco Update: Financial Standard, Monday July 2, 2007, pg18

The Managing Director of Nospetco Oil and Gas Limited, Alhaji Siddiq Manga, has publicly denied the company's involvement in the collection of deposit from the general public. He vivified the fact that the company only operates joint venture schemes. In his words, "We do not canvass for investment and neither do we operate accounts, our funding scheme is mainly likened to the JV arrangements of the NNPC, Chevron and Shell among others"
This came on the heels of his revealing that Nospetco Oil and Gas Ltd had acquired petrol stations in Alagbado, Ikorodu and Ibadan. Further he revealed some of his customers which include; Seven-Up Plc and Dunlop Plc. stating that the company has resumed the distribution of liquefied petroleum gas (LPG) from its gas plant purchased from Fadilad Gas located in Oluyole Industrial.
Amongst other things, this revelation has shed light on some grey areas:

1. Nospetco Oil and Gas ltd is not Nospetco the finance house. (at least as publicly declared by the M.D)
2. Nospetco Oil and Gas ltd does not get its funds from public deposit.
3. Nospetco the finance house is still shady and in the shadows and is definitely not to be trusted (at least for now).



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